Offline phone retailers demand discounts in line with E-commerce platforms

Brick and mortar mobile phone retailers have demanded that India’s top five smartphone brands – Xiaomi, Samsung, Oppo, Vivo, and Realme — provide the same discounts to the offline channels as those being given to ecommerce platforms.

The demand follows clarifications from top ecommerce marketplaces and many brands that the discounts offered online are extended by the brands, and not the online channel.

“Online exclusivity and offers have slaughtered our business,” All India Mobile Retailers Association (AIMRA) said in similar letters to Samsung, Oppo and Vivo. “As a manufacturer, you are responsible for maintaining the balance of online and offline mobile retail business; however, you are creating a gaping divide between these two and misbalancing the entire mobile retail business,” it said.

In a separate letter to Xiaomi and Realme, the retailer group said the 15 to 30-day ‘priority window’ period given to online channels has snatched business opportunity from offline retailers, creating a “huge disparity”. In some cases, brick and mortar stores are given models at higher prices than online, it alleged. “We feel it is very unfair to provide all backup and support to them (online) and leave us groping in the dark,” it said.

Diwali last year was the worst festive season ever for the offline mobile retail business, AIMRA said in its letter to Samsung. Retailers fear a repeat this year. The letters to the brands assume significance as festive season sales have begun with a furore. Analysts expect the season will generate revenues of $4.8 billion, or about Rs 34,100 crore, for retailers.

With the absence of direct discounts from brands, the offline trade feels it is losing out on the opportunity to get more customers while online retailers are using their ‘dominant position’ to take consumer share. The mobile retailer forum has already raised this issue with the CCI, commerce ministry and the Department for Promotion of Industry & Internal Trade. It has sought that the government curb the practice of exclusive tieups between etailers and smartphone makers to lower prices.

AIMRA president Arvinder Khurana said retailers need to relook at their policies to protect the offline trade, which still makes up over 63% of the mobile phone sales in the country, and ensure level-playing field. “The brands should give offline retailers the same discounts that they’re giving to online,” he told ET. “Online platforms are coming out with disclaimers that discounts are offered by the manufacturer whereas retailers are told otherwise, by the brands.”

Flipkart did not respond to questions, but ecommerce industry insiders said online platforms were carrying disclaimers in advertisements on the sales that the discounts came from brands directly, and not etailers. Further, easy finance schemes and cash backs on purchase of certain amounts were being given by non-banking finance companies and banks.

An Amazon India spokesperson, in response to ET’s queries, said: “Amazon India is a pure third-party marketplace where our sellers have complete liberty to solely decide their product prices. Amazon India is in compliance of all applicable laws.”